Yes, you can get an international battery storage insurance, and it’s becoming increasingly essential as Battery Energy Storage Systems (BESS) expand globally. Battery storage insurance provides comprehensive coverage for energy storage projects across multiple countries, addressing the unique risks these systems face including fire hazards, performance degradation, cyber threats, and regulatory compliance challenges. As the renewable energy sector grows, specialised insurance brokers develop tailored solutions to protect these valuable investments worldwide.

What is battery storage insurance and why do you need it?

Battery storage insurance is specialised coverage designed to protect BESS operating across different countries and regulatory environments. This insurance addresses the unique risks associated with storing electrical energy in battery systems, from lithium-ion installations to emerging technologies, providing protection for both the physical assets and business operations.

The coverage scope encompasses various energy storage technologies, with lithium-ion batteries being the most common due to their high energy density and efficiency rates of 85-95%. These systems can range from small-scale commercial installations to massive battery farms with hundreds of megawatt-hour capacity, all requiring specific risk management approaches.

Key risks addressed include:

• Fire and explosion hazards, particularly thermal runaway events in lithium-ion systems where temperatures exceed 130–150°C, causing dangerous chain reactions
• Performance degradation, as battery capacity naturally decreases over time, potentially affecting project returns
• Cyber security threats targeting sophisticated battery management systems and energy management software
• Environmental contamination from toxic gases including hydrogen fluoride (HF) and carbon monoxide (CO) during thermal runaway events

The growing importance of this insurance stems from the rapid expansion of battery storage projects globally. As renewable energy integration accelerates, BESS play crucial roles in grid stabilisation, peak shaving, and energy arbitrage, making their reliable operation essential for energy security and financial returns.

What types of coverage are available for international battery storage projects?

Battery storage insurance encompasses several coverage types, each addressing specific aspects of project risk. Property insurance forms the foundation, protecting physical assets including battery modules, power conversion systems, energy management systems, and associated infrastructure against damage from fire, weather events, or mechanical breakdown.

Business interruption coverage protects against revenue losses when BESS cannot operate due to covered incidents. This is particularly important for projects participating in energy arbitrage or frequency regulation markets, where downtime directly impacts profitability. The coverage typically includes lost revenue from energy trading and additional costs incurred during system restoration.

Product liability insurance becomes essential when BESS are integrated with other technologies or when system failures could affect third parties. Professional indemnity coverage protects against claims arising from design errors or operational mistakes that could compromise system performance or safety.

Cyber security protection addresses the digital vulnerabilities inherent in modern battery management systems. These sophisticated control systems can be targeted by cyber attacks, potentially causing operational disruptions or safety incidents. Performance guarantees provide coverage against underperformance relative to expected output or efficiency levels, protecting investors against technology risks.

Furthermore, Environmental Liability insurance is paramount. Standard General Liability (GL) policies often contain a total pollution exclusion, meaning they will not cover cleanup costs, bodily injury, or property damage resulting from the release of toxic gases (like hydrogen fluoride) or contaminated firefighting water runoff following a thermal event. Environmental Liability coverage specifically steps in to close this critical gap.

Additional coverage options include:

• Machinery breakdown for specialised equipment
• Transit insurance for international equipment shipments
• Cleanup and remediation costs following thermal runaway events
• Defense costs for regulatory compliance issues

How do international regulations affect battery storage insurance requirements?

International regulations significantly influence battery storage insurance requirements, with varying standards across different countries and regions creating complex compliance landscapes. European Union regulations emphasise safety standards and environmental protection, often requiring specific insurance minimums for grid-connected storage systems.

In North America, regulations focus heavily on fire safety and electrical codes, with some jurisdictions mandating specific coverage levels for commercial installations. Asian markets present diverse regulatory approaches, with countries like Japan requiring earthquake coverage due to seismic risks, while others prioritise grid stability and frequency regulation compliance.

Compliance considerations extend beyond basic insurance requirements to include safety certifications, environmental assessments, and operational standards. Many countries require BESS to meet specific technical standards before insurance coverage becomes available, creating interdependencies between regulatory compliance and insurability.

Mandatory insurance minimums vary significantly across key markets. Some European countries require minimum liability coverage for grid-connected systems, while certain US states mandate specific coverage levels for utility-scale installations. These requirements often influence project economics and financing structures.

Regulatory frameworks also affect coverage availability, as insurers must understand local laws and standards to provide appropriate protection. Projects operating across multiple jurisdictions face additional complexity in ensuring comprehensive coverage that meets all applicable regulatory requirements while avoiding coverage gaps or overlaps.

What factors determine the cost of battery storage insurance?

Several key factors influence battery storage insurance pricing, with project location being a primary consideration. Geographic risks including natural disasters, political stability, and local emergency response capabilities significantly affect premium calculations. Projects in regions with established renewable energy infrastructure typically benefit from more competitive rates.

Technology type plays a crucial role in pricing, with LFP (Lithium Iron Phosphate) batteries often commanding lower premiums than NMC (Nickel Manganese Cobalt) variants due to their enhanced thermal stability and safety profile. The specific battery chemistry affects risk assessment, as some technologies present higher fire risks or have shorter operational lifespans.

Installation environment impacts pricing through factors such as indoor versus outdoor deployment, proximity to populated areas, and integration with existing infrastructure. Grid-scale installations may face different risk profiles compared to behind-the-meter commercial systems, affecting insurance costs accordingly.

Project scale influences pricing through economies of scale and risk distribution. Larger installations may benefit from reduced per-megawatt-hour rates, while smaller projects might face higher relative costs due to fixed underwriting expenses.

Safety systems implementation significantly affects premiums, with advanced fire suppression systems, comprehensive monitoring, and robust battery management systems helping reduce insurance costs. While traditional water systems are often used for cooling adjacent cells to prevent thermal propagation (as mandated by standards like UL 9540A and NFPA 855), underwriters pay close attention to the environmental controls in place. This includes managing contaminated water runoff or the release of toxic gases, as these environmental liabilities are often a primary cost driver following a major BESS incident.

Strategies for managing insurance costs include implementing comprehensive safety protocols, selecting proven technologies with strong performance records, and working with experienced installation partners who understand international best practices.

How do you choose the right international insurance provider for battery storage projects?

Selecting an appropriate international insurance provider requires evaluating several critical capabilities, starting with the insurer’s global network coverage and ability to provide consistent service across all project locations. Providers with established international partnerships can offer seamless coverage coordination and local expertise where needed.

Experience with energy storage technologies is essential, as BESS insurance requires specialised understanding of technical risks, operational patterns, and emerging technologies. Look for providers who have handled similar projects and understand the specific challenges associated with different battery chemistries and applications.

Assessing the insurer’s financial stability and claims-paying ability ensures they can meet obligations when claims arise. International projects require providers with sufficient capital reserves and reinsurance arrangements to handle large losses across multiple jurisdictions.

Claims handling processes deserve careful evaluation, particularly for international projects where coordination across time zones and regulatory environments can complicate settlement procedures. Understanding the provider’s approach to loss adjustment, expert appointment, and settlement timelines helps set appropriate expectations.

Policy terms comparison should focus on coverage scope, exclusions, and conditions specific to BESS risks. Key considerations include:

• Coverage for pollution exclusions and gradual pollution events
• Environmental liability protection (claims-made basis) versus general liability (occurrence-based)
• Coverage for emerging risks like cyber security or performance degradation
• Regulatory compliance costs and defense costs

Consider working with specialised insurance brokers who understand the renewable energy sector and can navigate the complex international insurance marketplace. These intermediaries can help evaluate multiple providers, negotiate terms, and ensure comprehensive coverage that meets all project requirements while managing costs effectively.

Who needs battery storage insurance?

Battery storage insurance serves multiple stakeholders across the energy storage value chain:

• Developers: Protect project investments during development and construction phases
• Owners/operators: Ensure operational continuity and protect revenue streams
• Investors/lenders: Safeguard financial interests and meet due diligence requirements
• EPC contractors: Manage construction and performance risks across international projects

Each stakeholder faces unique risks that require tailored insurance approaches, from construction-phase coverage to long-term operational protection.

Conclusion

Battery storage insurance represents a critical risk management tool for the rapidly expanding global energy storage market. As BESS technology continues to evolve and deployment scales increase, comprehensive insurance coverage becomes essential for protecting investments, ensuring operational continuity, and managing complex international risks.

The importance of specialised coverage cannot be overstated, particularly given the unique technical risks associated with thermal runaway events, environmental contamination, and performance degradation. Understanding coverage gaps between general liability and environmental liability insurance, along with the differences between occurrence-based and claims-made triggers, enables stakeholders to make informed decisions about their risk management strategies.

Working with experienced insurance providers and brokers who understand both the technical complexities of BESS and the international regulatory landscape ensures comprehensive protection that supports the continued growth of clean energy infrastructure worldwide.

Protect Your Battery Storage Investment Today

Don’t leave your battery storage project vulnerable to unforeseen risks. Contact our specialist energy storage insurance team today to discuss your international coverage needs. Our experts will work with you to develop a comprehensive insurance strategy that protects your investment, ensures regulatory compliance, and provides peace of mind across all your global operations. Schedule your consultation now and secure the protection your energy storage project deserves.